This study examines the impact of earnings quality on the cost of equity. So, six criteria for measuring the quality of earnings was considered. The first measures of earnings quality was based on the relationship between operating cash flow and operating profit. The second criterion was earnings quality based on earnings predictability. The third one was sustainable profits that have been reported. The fourth criterion was measuring the total commitment. The fifth one was measuring the quality of working capital accruals. And sixth criterion was the ratio of operating activities cash to operating profit. Then the impact of each of these criteria was assessed on the expense of equity independently. Results of hypothesis testing showed that there were a inverse relationship between all criterion of earnings quality and cost of equity. Firms with higher earnings quality have lower cost of equity than firms with lower earnings quality.
کلید واژگان :Quality of earnings, quality of accruals, costs of equity
ارزش ریالی : 600000 ریال
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